Bankcard Debt Delinquencies Up

Delinquencies on bankcard debt are headed up after nearly four years of steady decline, according to CardTrak and Bankcard Barometer, monthly newsletters published by affiliates of RAM Research Group.

Since the first of the year delinquencies - defined as the percentage of average receivables more than 30 days past - have risen from 3.85 percent to 4.11 percent. That's a year-to-date increase of 7 percent.

With rising delinquencies card issuers will face higher charge-offs, or uncollectible debt, throughout 1995, said RAM, a Frederick, Md.-based company that tracks the credit-card industry. Coupled with the Federal Reserve Board's aggressive increases in funding costs and the early sings of a slowdown in consumer spending, the nation's bank credit-card issuers will post smaller profits this year than in the past two years, RAM predicted.

Profits may also be lower as pricing competition remains strong. Many of the nation's largest issuers are still dangling teaser rates to attract new customers, RAM surveys show.

However, evidence is emerging that while consumers may be biting, they are not swallowing the bait. When a promotional rate expires, consumers can easily take advantage of another promotional deal and promptly transfer their card debt. Attrition rates, particularly among teaser rate players, are inching up, RAM said.